CCUS Infrastructure Ownership Structures – Detailed Explanation With Case Laws

1. Meaning of CCUS Infrastructure Ownership

CCUS (Carbon Capture, Utilisation and Storage) infrastructure includes the physical facilities required to capture, transport, utilise and permanently store carbon dioxide (CO₂). A CCUS system may include:

carbon-capture equipment;

compressors;

pipelines;

storage terminals;

injection wells;

geological storage formations;

monitoring equipment;

CO₂ hubs; and

shared transportation networks.

CCUS infrastructure ownership structures determine who owns these assets, who controls them, who finances them, who has access to them, and who carries legal responsibility for their operation and environmental risks.

This is particularly important for CCUS clusters because several industrial emitters may depend on the same pipeline or storage facility.

2. Main Ownership Models

A. Single Private Ownership

Under this model, one private company owns the capture, transport or storage infrastructure.

For example:

Private company → owns CO₂ pipeline → owns storage facility → charges industrial users.

The advantage is relatively simple decision-making and investment control. However, the owner may obtain significant market power if the infrastructure is essential and competitors cannot easily construct alternative pipelines or storage facilities.

Therefore, regulation may need to control access, tariffs, safety and environmental obligations.

B. Public Ownership

Government or a state-owned enterprise may own strategic CCUS infrastructure.

Public ownership can be appropriate where infrastructure has national importance or where private investment is initially uncertain. However, public ownership does not eliminate the need for regulation.

South African electricity jurisprudence provides an important analogy. In Eskom Holdings SOC Ltd v Vaal River Development Association, the Constitutional Court explained that Eskom is a state-owned enterprise performing important public functions within an extensive statutory regulatory framework. (SAFLII)

The principle is relevant to CCUS: ownership and regulatory authority are separate concepts. An infrastructure owner cannot necessarily exercise unrestricted control merely because it owns the asset.

3. Public-Private Partnership Model

A CCUS project can also be developed through a public-private partnership (PPP).

For example:

Government → provides land/regulatory support

Private companies → finance and construct pipelines

Industrial emitters → pay transportation and storage charges

Public regulator → supervises the system

This model distributes investment and operational responsibilities between public and private participants.

The legal agreements should clearly allocate:

construction responsibility;

operating standards;

investment obligations;

maintenance;

insurance;

environmental liability;

leakage liability;

decommissioning;

data-sharing; and

ownership after project closure.

4. Joint Ownership and Consortium Structures

Several industrial emitters may jointly own infrastructure.

For example, five cement, steel and chemical companies may establish a special-purpose company that owns a common CO₂ pipeline and storage hub.

Each participant contributes capital and receives capacity according to its contractual rights.

This model can reduce duplication because individual companies do not need separate pipelines and storage facilities.

However, disputes can arise concerning:

voting rights;

capacity allocation;

expansion costs;

maintenance costs;

new participants;

withdrawal from the consortium; and

liability for accidents.

A detailed shareholders' agreement and regulatory framework are therefore essential.

5. Third-Party Access

A major issue in CCUS infrastructure ownership is whether the owner must allow third-party access.

Suppose Company A owns the only CO₂ pipeline connecting an industrial area to a geological storage site. Companies B, C and D may need that pipeline to participate in the CCUS market.

Without access regulation, Company A could potentially control entry into the market.

This creates an essential-infrastructure problem similar to regulated electricity networks.

South African electricity jurisprudence demonstrates why infrastructure ownership may be accompanied by public-law responsibilities. In Eskom Holdings SOC Ltd v Letsemeng Local Municipality, the Supreme Court of Appeal held that Eskom's relationship with municipalities could not be viewed merely as an ordinary contractual relationship because Eskom performs important public functions within a constitutional and statutory framework. (Saflii)

The analogy is useful for CCUS infrastructure that becomes essential to national decarbonisation.

6. Ownership of Underground Storage

The most complicated ownership question concerns geological storage formations.

The legal system must determine:

who owns the underground formation;

who owns injected CO₂;

who controls injection rights;

who is responsible for leakage;

whether storage rights can be transferred;

what happens after closure; and

whether long-term responsibility eventually transfers to the State.

In South Africa, CCUS may interact with existing environmental and mineral-resource legislation. Consequently, ownership of surface land does not automatically answer questions concerning subsurface resources and storage rights.

A dedicated CCUS regime could therefore create a specific storage licence or permit, rather than relying entirely on ordinary property ownership.

7. Environmental Liability

Ownership must be separated from environmental responsibility.

An infrastructure owner may be responsible for:

preventing leakage;

monitoring storage;

repairing damaged pipelines;

maintaining injection wells;

reporting environmental incidents; and

restoring affected areas.

The polluter-pays principle and environmental-management duties are particularly relevant.

In Fuel Retailers Association of Southern Africa v Director-General: Environmental Management, the Constitutional Court emphasised integrated environmental decision-making and the need to balance environmental protection with socio-economic considerations. This principle is relevant to decisions about large CCUS infrastructure because ownership arrangements should not undermine environmental accountability.

8. Ownership and Public Accountability

Where CCUS infrastructure is state-owned or substantially supported by public money, additional transparency and accountability issues may arise.

The recent Eskom Holdings SOC Ltd v AfriForum litigation illustrates that a state-owned entity can face significant legal obligations concerning access to information, although commercial confidentiality may justify withholding particular information in appropriate circumstances. (Saflii)

This principle could become relevant to publicly owned CCUS systems involving:

storage capacity;

infrastructure costs;

government guarantees;

environmental monitoring;

contracts; and

emissions data.

9. Recommended Legal Structure

A comprehensive CCUS ownership framework should clearly separate ownership, operation and regulation.

A possible structure is:

Government
↓
CCUS regulator
↓
Licensed infrastructure owners
↓
Capture facilities → transport network → storage facility
↓
Industrial users

The law should establish:

ownership rights;

operating licences;

third-party access;

tariff principles;

environmental obligations;

monitoring requirements;

financial-security requirements;

accident liability;

closure obligations; and

post-closure responsibility.

Conclusion

CCUS Infrastructure Ownership Structures determine who controls the physical foundations of carbon capture, transportation and storage. The principal models include private ownership, state ownership, PPPs, joint ownership and special-purpose consortium companies.

The central legal challenge is that CCUS infrastructure may be privately owned but can become strategically important public infrastructure. Therefore, ownership should not automatically mean unrestricted control.

South African cases involving Eskom, particularly Eskom v Vaal River Development Association and Eskom v Letsemeng Local Municipality, demonstrate that ownership of essential infrastructure can exist alongside extensive statutory, constitutional and regulatory obligations. (SAFLII)

For future CCUS regulation, the strongest legal framework would clearly distinguish ownership, access, operation, environmental liability and regulatory supervision. This would allow private and public investment while preventing infrastructure ownership from becoming a barrier to competition, decarbonisation or environmental protection.